6% Yield Bristol Myers Squibb Value Trap Or Long-Term Opportunity? | FAST Graphs
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- เผยแพร่เมื่อ 30 พ.ค. 2024
- In this video, Chuck Carnevale, Co-Founder of FAST Graphs will go over Bristol Myers Squibb (BMY) and help determine whether BMY is a Value Trap Or Long-Term Opportunity
Should you invest in Bristol Myers now, this A rated pharmaceutical giant now that it’s offering a 6% yield and trading for less than 9 times earnings? Or is this a value trap that should be avoided at all costs?
Watch this video and find out where BMY is a Value Trap Or Long-Term Opportunity
This is the link to video produced on Bristol Myers from October 7, 2022
• Bristol Myers Squibb C...
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Disclaimer: FAST Graphs is a tool designed to reveal and present information related to financial data and investment metrics. It is not intended to provide specific advice or recommendations. Instead, it offers a comprehensive view of relevant data, empowering users to make informed decisions based on their own analysis. It's your first step to a more comprehensive research and due diligence process. In short, it is a tool to think with. The opinions in this video are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned.
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This is the video that i've been desperately waiting for for weeks. Thank you Chuck!😊
Thanks Chuck - You are the Best!
Earnings Determine Market Price.... In the long run.... and
Emotion Determines Market Price... in the short-term
To get to the next peak, you have to accept walking through the valley to get there...
Great minds. I have been amassing shares for some time now and will be picking more up on Monday after my interest payments.
Another nice thorough presentation from Mr. Valuation. My Avg. Cost basis is $53.15 have been buying around $40.
Similar Buy In on my side. Hope this works out just fine for both of us! Will most likely add some more soon
@@normansteinmetz643 my average is around $45 and I'm DCAing every week with this one. Great dividend while we wait for the price to recover. I hope it stays down a little longer so I can increase my position.
“Markets can remain irrational longer than you can remain solvent.”
That is a fallacy.
I wonder if or can do a video on CVS. It’s had a bit of a collapse and I was wondering if it was good buy
I picked up 200 shares of cvs! By the time he makes a video it will be up 20% lol!!!
Thank you Chuck! Don’t pay attention to the negative comments- Andre Kosztolany was also laughed at until he proved his point by getting incredibly rich while the ones who mocked him lost money.
Thank you for your valuable insight!
sometimes I just like to mess with them
Have been watching the price drop and done a good bit of research, but your video was the deep dive and justification I was looking for. Confirmed my purchases to date and will continue to accumulate below $45.75 for me. Thanks Chuck!!
same
I have seen several.different discussions lately for BMY. I finally pulled the trigger earlier today. This feels timely 😂
It's a good opportunity, quite undervalued and great dividend. I've been adding via DCA the last several months. Thanks!
Thanks Chuck. I sold my BMY at the end of 2021 and have sought a reentry point. This looks to be it!
Great Video, Chuck. Thank you!
Doubled my position last week.
I wonder if there will be a video in similar quality on MPW?
Always a quality video with great insights, thank you Chuck!
These videos are educational, inspiring & humbling. Thank you once again for producing great content & developing the best tool in the market.
Thanks once again Chuck for a very timely presentation. I was updating my stock spreadsheet this afternoon and was shocked by the drop in earnings on BMY. You have really set my mind at ease. I hope one day to become as proficient as you at analyzing stocks with Fast Graphs.
Another masterclass in doing due diligence. Thanks, Chuck
In addition to value traps, can you do an episode on "chasing"?
Being dialed in to value using FASTgraphs, I've become very hesitant to buy "overvalued" growth stocks, like NVDA.
By the time I'm convinced that it's growth prospects are legit, it's PE is north of 70, and i just can't bring myself to pull the trigger.
I've got the tool, now i need the "thinking with" part. 😊
NVDA is overvalued from the point of view of not being able to fully participate in its growth. On the other hand, as I stated often, you cannot overpay for a growth stock and lose money if you hold it long enough. In other words , NVDA would be a long-term hold from here with the possibility of short-term drops along the way. Nevertheless, it’s growth potential appears to be extraordinary for now. Regards, Chuck
this info is gold.....a real expert this man
Definitely going to keep an eye on this one.
Thank you for your video.
Great Summary
I hold this stock and I am totally chill , collecting my dividends , looking to the long term.
Great vid Chuckster !!!
Thanks Chuck. Will be accumulating this
Great video Chuck. I'm actually researching my entire portfolio and this answers questions I had about Bristol-Myers. Sounds like a great long term opportunity.
Thanks a lot! I thought about buying more in 10/23, but I bought MDT, DGX and ABT instead to diversify more in the same sector.
Thank you, Chuck. I started a position in Jan and have been dca-ing since.
Thanks Chuck, would be cool to see a video on CVS / PII / SWKS…. Long BMY down around 15% will probably add some at these prices, hope mgt is buying back shares at this valuation and lower
CVS definitely would be good to see.
Probably not this year, right? Didn't have any earnings
Hi Chuck. Great analysis, as always. Thank you for your work. The more down goes, the more I buy it. It's a great company.
Excellent Analysis Chuck as usual!
Seems like a bankruptcy for this company would be highly unlikely given the kinds of drugs that they produce. The leverage would otherwise be a concern, especially given the high amt written to goodwill. The profitability may decline for the short term, but it is such a massive company that it would be unwise not to hold it for diversification. Ima buy at $35
No need to dig in, buy below 34, you gonna see some major squeeze in the whole Healthcare sector before it actually bottoms
thank you
Thank you!
Another great analysis! Thanks Chuck.
Merck had the same drop in EPS and nobody cared. Stocks are not treated equally.
I personally don't understand why they included these one time acquisition charges into adjusted EPS. Purpose of adjusted EPS is to filter these one time events.
So now both Merck and BMY have these ugly drops
in EPS for one year but Merck is at all time high and BMY back 10 years. It's all about momentum and nothing more.
With all due respect, that’s a very shallow comment. In the long run it’s all about earnings and fundamental strengths. In the short run it’s about emotions. The long run is predictable, and the short run is not. Sorry, but it’s not “all about momentum and nothing else” - it’s always about the strength of the business. Finally, what really makes no sense is trying to quantify a market that is irrational and behaving based on a motion. Trust fundamentals rather than price volatility.
BTW in the video, I forgot to add that I explained why IPRD as specific accounting rules. Here is a link that will help : www.stout.com/en/insights/article/process-research-and-development-takeaways-updated-accounting-and-valuation-guide
Since my crystal ball has cracked, do you have any advice specifically for:
Earnings Forecast Revisions?
In other words, where could one hear "whispers" or "tea leaves" before the Revisions numbers are released and the FASTgraphs forecasting chart collapses.
Message boards? Options chains? Corporate website?
There has to be a way to "feel" like something bad is coming at least on a probability basis.
I know the answer is to take my lumps and just average down at the new prices. But i really don't like lumps.
Does anything ever trigger Mr Valuation's "gut feeling" before need is officially announced.
Please get your bells fixed, both bottom and top. 😊
Chuck! Please highlight the excellent Forecasting>Previous Estimates buttons.
I use them to get a visual representation of trends in Earnings estimates.
I use it all the time. 😊
Great vid Chuck thanks!
I hesitate to buy above my cost basis. It's been an excellent stock for me over the past 14 yrs or so.
Thanks for the update, Chuck.
I think the concept of value trap applies to a company/stock like this in the sense that the street is pricing in that their pipeline is not sufficient to replace their current cash cow drugs approaching patent cliffs.
So it's certainly not easy to determine if that's accurate or not (analysts try their best and retail investors have to take their guidance as gospel or have an understanding of pharmaceuticals).
If pharmaceuticals aren't in the circle of competence this one is probably better left alone. Probably why it's so cheap. Most value investors put it in the too hard bucket and move on.
That level of neglect could lead to opportunity though if the risk/reward proposition fits an investors style and the position is sized properly. Definitely tempting. But hard to analyze with confidence.
www.bms.com/assets/bms/us/en-us/pdf/investor-info/doc_presentations/2024/BMY-2024-Q1-Results-Investor-Presentation.pdf
Very nice video 😊
Hi Chuck, very interesting I think I might go for a little buy here … hope you do a little video on $hims seems very interesting one rn
I thought it was a bargain in March 2021 and am down a whopping 35%. Steer clear of this thing....
Focus on fundamentals. Stock prices are liars in the short run. You think it would be better to buy the stocks that have gone up a lot?
excellent, high class video!
you can compare this to Roche and Pfizer. All kinda similar.
Another great video
Requesting Vertex and Dexcom.
Textbook example of catching a falling knife.
Nice video Chuck. After looking at the balance sheet I noticed and substantial increase in Long Term Debt at 51B; +13B in a quarter, +45B since 2018. Do you see this as a degrading factor on their fundamentals and a reason the stock might suffer in the future?
I wish I could profit in the bubbles, but my timing is horrible. So I've been away from nvidias. Will see how it finally unfondles.
I'm not sure of the right channel to request a quick analysis, but I'd like to hear your take on GoPro.
GoPro:
- Falling revenue
- Falling Profits
- Negative FCF
- Share Dilution
- Falling margins YoY
- Around $40m stock based compensation per year for execs sending a company to the ground...
- Insider selling...
- No dividends, so no return to shareholders.
- In my opinion, no Moat. A phone can do almost everything a GoPro can, and even better.
I believe that sums up things in my opinion. I would not even consider this company for long term investing, there are a lot better companies around.
Make your own analysis and decision.
PFE vs. BMY what do you think ? is the better play, because both have a nice yield and both are big player in the pharmacy game, thanx a lot
BMY looks like a better short-term play as a recovery company and transition. PFE is more a steady Eddie with a lot less debt. Nevertheless, both look attractive at current valuations. I recently did a video on Pfizer versus Merck. It’s really a judgment call.
@@FASTgraphs thank you for the fast response and your great work, doing for all the people around the world
neither' WHR
FASTgraphs is an excellent tool for finding undervalued stocks.
Its net also catches value traps that the individual investor has to sidestep using thinking (tool to think with, after all)
Using my example of buying CVS at an excellent valuation, only to be blindsided by Earnings Forecast Revisions, and now sitting on a loss.
How can the individual investor avoid getting crushed by revisions?
Thanks.
CVS value is there. Unfortunately the price is not, yet in my opinion it’s a buy def under pressure
It seems it's an excellent tool for finding cheap stocks. Whether they are undervalued or not requires more work.
Great video
Consider the almost 1billion in lawsuits
Perhaps this ist why ITS cheap or correctly priced
I am in boy!.
Hey Chuck, new sub here. I’m really thinking to pull the trigger here at these levels. My only concern is the high payout ratio of over 200%. Can you share your thoughts? Thanks
Listen to Cem karsen, especially his observations about dispersion and the indexes being Pinned; if NVIDIA etc goes through the roof and the index is pinned by big money passive flows and their selling VOL , you will get stocks that have to fall in order to balance NVIDIA. Possibly BMS is one such victim
Excellent video Chuck, Thx. You indicated a rising and high Debt/Capital ratio. 1. What is your definition of capital? Does ‘capital’ relate to Equity or are you referring to Mkt Cap? 2. Does FastGraphs provide raw numbers data? If so, how many years typically are provided?
Here are the definitions according to Investopedia: What Is the Debt-To-Capital Ratio?
The debt-to-capital ratio is a measurement of a company's financial leverage. The debt-to-capital ratio is calculated by taking the company's interest-bearing debt, both short- and long-term liabilities and dividing it by the total capital. Total capital is all interest-bearing debt plus shareholders' equity, which may include items such as common stock, preferred stock, and minority interest.
Market Cap is totally different and simply the price of the stock times the number of shares issued and outstanding. Finally, yes FAST Graphs provide comprehensive data for up to 20 years if available, to include full financial statements etc.
@@FASTgraphs This makes sense. A related stat I find useful is Total Debt/OCF, essentially the number of years needed to pay off the debt assuming all available cash applied. (I use an average of 3-10 years OCF if latest year seems unrepresentative). I’m relieved that this stat is not comparing Debt/MktCap as that would make no sense whatever to me. I appreciate the 20 years data history as I find value in going past 10 years for some companies. (OCF = Operating Cash Flow).
Excellent video. According to the chart this should be a $5 stock in December
And $103 by Dec 2025
I own it and wish I never bought it - will continue to hold due to dividend, I can't imagine buying more. It has been a sieve for me.
Could sell some puts at 40 for June 24.. collect .42... then if put the stock get the .60 dividend in first week of july... bringing your cost of the stock around $39
I bet someone knew something few years ago and they were expecting current issues
There are no issues. They bought few companies recently and that diluted EPS. Revenue is at all time high so no issues here.
You think someone saw the future? You think they have a crystal ball? On the other hand, everyone knew that the patents were running out in a few years. The real question is how soon will they be able to replace that business once the exclusivity is gone.
I mean fast graphs was showing the company is going to the moon yet the price didnt reflect that a few years back as i was following this stock, which puzzled me greatly. And now the grand finale. The fat cats didnt have the crystal ball, but they sensed something for sure
I’m in at $52 dang
Hey 👋, how can the Operating Cash Flow estimate for 2024 be LOWER than the Free cash flow estimate?
In reality, operating cash flow will be higher. However, what you are seeing are estimates which are forecasts. Notice that there are a different number of analysts in the forecasting graphs. There are 8 forecasting operating cash flow and only 6 forecasting cash flow to equity. Remember, estimates are almost certain to be wrong. However, the majority of time they are within a reasonable margin of error. REGARDS , Chuck
pfizer or Bristol Myers, Chuck?
BMY looks like a better short-term play as a recovery company and transition. PFE is more a steady Eddie with a lot less debt. Nevertheless, both look attractive at current valuations. I recently did a video on Pfizer versus Merck. It’s really a judgment call.
The dividend is safe until it isnt !
Your are alive until you are not. The company does business until it doesn’t. I could go on, but I hope you get the point. In reality, by analyzing a company’s cash flows and their ability to keep generating them can give you a solid indication of whether or not the dividend is safe or not. Some clichés are just silly in my humble opinion. Regards, Chuck
@@FASTgraphs
My point was that their earnings declined but they kept paying the dividend.
That can only go on so long.
@@janshuster1426 Dividends are not paid out of earnings, they are paid out of cash flow. BMY;s cash flows are still solidly covering the dividends.
Big pharma has a big problem in general. New therapeutics get expensive to develop. And the new gen therapy is a big risk and does not work, you saw that with the Covid Therapie.
Thanks for sticking to the god old-school value investing principles, but I disagree in this simplistic way to value companies at 15x operating earnings. After all if a company is unable to produce growth in the long run, all you are getting is this 6% from the dividend which is well below the stock market total retun. That's why I prefer to value them by dividend yeld plus earnings growth long term, only when this is 15% or higher (provided that you analysed the company and are reasonably sure that it's sustainable) you're in undervalued territory. In the past 20 years this company has barely produced any organic growth, only was able to grow a bit through expensive value-destroying acquisitions. So currently less than 6% dividend plus long term growth of 3-4%, now it barely reaches 10% total return or the historical stock market average return, so we could consider it fairly valued, not undervalued. Ofc you can consider short term factors like debt, pipeline, m&a etc. but long term performance (past 20 years) is a great indicator already of what kind of growth can the company generate in the future.
fastgraphs.com/blog/why-a-15-p-e-ratio-is-fair-value-for-most-companies/
patent expiry risk is something you only gloss over. it is the biggest in pharma now as a % of their total sales. Generics....
BMY, Pfizer, Roche, J&J
Hey Chuck, i recall telling you several years ago that BMY and WBA were value trap. You disagreed at that time but the collapse in earning proved my point. WBA is down 70% last 5 years, BMY is back to its 1997 share price. Both have been catastrophic investments for investors regardless of dividends.
I still disagree
@@FASTgraphs We each stick to our positions, not sure what you find attractive in both companies...Anyway I bought NVDIA back in 2018 when there was a brief tech bear market. I am up 2000% right now and I am pretty much settled for life money wise. I am gonna still renew my fastgraphs subscription since it gave me a lot of valuable infos and brought very good luck :-)
@@moma8229 I am also long Nvidia, but IT is a different class of investment for a different type of investor. These investments were for income investors. Nvidia is a very risky growth stock. Both have their place but for different reasons. For retired investors living off their income Nvidia would be a very risky choice. People invest in corporate and treasury bonds, and CDs etc. for their income and safety. Be careful being a genius in a bull market. GME is up almost 150% since April, but I wouldn’t recommend it. Investors need to invest based on their goals, objectives and most importantly risk tolerances.
Second 😂
Markets don't care about dividends & its only abt fwd outlook. Mngmnt lost credibility. They hv spent alot of money on overpriced acquisition & they continue doing it. Moreover they hv a big patent cliff where markets are worried how they are going to replace their current drugs with new generation of drugs
I don’t care about what “markets” think, and BMY has a strong pipeline
How about MPW? That is a really, really good value.😂
Yes it is
Any drug company not tied to weight loss drugs are losers these days.
Simple.
Why u can't trust analyst expectations/estimates. 💁
They are "right" until they are very wrong.
Check what Buffett & Munger say about analysts. That's what doesn't age well, Chuck. I think u fo your followers a disservice when u preach (and argue for) analyst expectations.
I never got the impression that Chuck preached or argued for analyst expectations. I think he's always been very clear about when he is presenting tangible current or historical business metrics vs. when he is showing expected future performance. Sometimes he even points out the frequency with which forecasts turn out to be right or wrong for specific businesses and discusses how certain businesses are easier to forecast then others.
So how do you do it? Do you make your own estimates or just simply buy stocks and than pray for growth?
@@oldmagemtg7008 for starters,I do not “preach” for analyst expectations. FAST Graphs provides the analyst scorecard that evaluates how accurate analysts have been on each individual company.. Nevertheless, as an investor you must have a reasonable forecast of the future otherwise you’re just guessing and investing blindly. Trained analysts that follow the company and industry are a great starting point. But once again, it’s imperative to have some idea of what the future might hold, and leading analysts following the stock are a good place to start. Regards, Chuck
sorry my above reply was directed towards @pizza-gb 1 ch
@@FASTgraphs just ignore trolls
BCHG … I dare you to analyze it
Maybe I would if I knew what it was.
I don't think he's interested in wasting time on speculative stock symbols worth a few million
@@thekongstocks I mean I’m up 103%. You call it speculative but I’m here for the money.
@@FASTgraphs is it too much work to look it up and then analyze it? I thought that’s what you did here
KONGRATS@@stew1dividend you're up 103% all-time or this year? What is your timeline?? If the market crashes or pulls back, you will be praying/wishing you own slow-moving Defensive stocks like $BMY
It'll come back. So will liesure suits.
How long did it take you to come up with that one?
It’s in a downward channel guy, until it breaks from that it’s not even worth asking the question, total nonsense.
ooh a downward channel I better wait until it doubles then I can buy it
@@FASTgraphs Down 30% off its April high, hasn’t broke downward trend line yet, help yourself fool.
@@FASTgraphs
Has a SCTR rating of 5.3 out of a hundred, its a turd circling the toilet at this point.
@@dannorris8478 A fool is someone who thinks they can predict short term price movements.
But it’s true, your video didn’t age well, Chuck. I hope Mike Stathis keeps exposing all of you fake investment gurus
Like I said in the video, the video did age well. Videos don’t age. The fundamentals can change, but that doesn’t affect the video that was originally produced. Everything in that video was accurate at the time, and if you were a subscriber to FAST Graphs you could have kept up with changes as they occurred, which I also stated in the video. It must be horrible to be such a cynic that can’t see quality information when you’re exposed to it.
@@FASTgraphs quality? People are down over 30% just for listening to you. You did the same with MPW. I guess that ad revenue was worth it to you. Like I said, I hope Mike Stathis keep exposing all of you fake investment gurus
Of course investing, like weather Forecasting, is a probabilistic exercise.
It is the overall statistical performance that counts, not a selected single element.
Also, value investing by its nature is a long term investing strategy.
FASTgraphs simply points out undervalued stocks, not when the market will return to fair value.
Calling a tool that presents a companies fundamental numbers an investment guru has to be the funniest comment i've ever seen. The numbers just are the numbers my friend.
Lots of excuses here. Weak.
No excuses just facts and reality
Not sure why you duscussingcstock when not sure….. I wish we discuss stock which 100%?sure and you add your believe to it. It’s a lot more interesting then argue for not clear stock
Thank you!